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What To Expect When Buying A Home Using A VA Loan
Have you served in the military or are currently serving? You may be eligible to use a 0 down payment VA loan! I am sure you are wondering whats next, how do I use this benefit and what should I expect through out the whole process.
Your first step is to contact a lender or a realtor who will be able to refer you to a lender. Contacting a lender to obtain a pre approval is a crucial step in the home buying process. Your lender will be able to give you a budget you will want to stay within after asking you qualifying questions and collecting necessary documents to issue a pre approval letter!
Once you have a pre approval letter the fun begins! Home shopping!! Your agent will take you out home shopping to view all the homes in your market that may be a perfect match for you and your family! Once you find your perfect home you are ready to submit an offer. After you have an accepted offer on a home, you should expect to make it to closing within the next 30-60 days! You are on your way to home ownership!!
After your offer is accepted you will be required to make a payment (typically a title company will hold this) called earnest money! Earnest money is money paid to confirm the contract, it will be held in an escrow account until closing, this shows the seller you are serious about buying their home! unfortunately you may lose your earnest money deposit if you default in the contract. Your earnest money will be returned to you at closing or it will be applied towards your closing costs.
Whats next? ... The next important deadline is going to be your inspection objection! You should hire a licensed inspector to come and perform an inspection on your future home, once you have your inspection report back you and your agent will need to discuss any issues you wish to have addressed. Your agent will then present this list to the other agent, and negotiate which items the sellers will correct and take care of before closing.
Your lender will order an appraisal, a licensed appraiser will come out and access the property to confirm it is worth the value you are receiving a loan for.
What if my appraisal comes in high? Thats great news you already will have equity in your home!
What if my appraisal comes in low? If your appraisal comes in low you will have a few options, as a VA buyer you are protected and able to back out of the contract with out recourse, You should attempt to negotiate with the sellers to come down to the appraised value. You may also bring cash to closing to cover the gap.
Before heading to closing, you also must select a home owners insurance and policy on your home. The lender will require you to carry homeowners insurance for the life of your loan in case of the event of a loss due to a fire or other hazard.
VA loans are 0 down right? will I have to bring a check to closing?
VA loans are 0 down that is correct! However you may need to bring funds to closing to cover your closing costs if they were not negotiated to be paid by the seller. items you may see that are included in your closing costs may include: origination, underwriting and processing fees, Title exam and insurance, Survey (if needed). If bringing money to closing is an issue for you, your lender also may have another option. You may be able to opt to lock in a higher interest rate which is going to provide a rebate, this rebate can then be used to cover a majority or all of your closing costs. Your lender will give you a solid number of funds you must bring to closing, just a few days prior to your closing date.
CLEAR TO CLOSE, once you have been given a clear to close by your lender, nothing more is needed. you are ready to close and enjoy your new home!!